In Market Basket Protests, Three Lessons For Corporate America

We have a lot to learn from the extraordinary scenes of worker protest that have played out in recent days. Last Friday in Tewksbury, Mass., warehouse, clerical and managerial employees of the Market Basket supermarket chain banded together to protest the firing of their CEO, Arthur T. Demoulas, and to register their outrage at a shift in corporate strategy that would benefit owners at the expense of a loyal workforce and the company they helped build. They did it again on Monday after the company, on Sunday, fired eight employees who had skipped work to attend another rally. The protests continue.

This type of broad-based, collective action is unprecedented in modern U.S. labor history. From it, we can glean three lessons.

...these employees are taking on the horde of Wall Street analysts who criticize companies that choose to pay employees well and build a loyal customer base rather than just maximize shareholder returns.

First, it demonstrates the growing frustration building among workers at all levels with short-term, self-interested owners and corporate executives who choose to line their own pockets at the expense of the workforce and their customers. In doing so, these employees are taking on the horde of Wall Street analysts who criticize companies that choose to pay employees well and build a loyal customer base rather than just maximize shareholder returns. For years, Wall Street analysts criticized Costco and Southwest Airlines for following similar strategies, urging them to behave more like competitors such as Walmart or other airlines. Yet these companies showed consistently, over many years, that they could provide good jobs, products and services, and good profits and long-term shareholder returns by treating all stakeholders fairly and with the respect they deserve. So the first lesson: Corporate America better wake up and start listening to their employees, or they may find themselves listening to them through bullhorns and in the national press.

Second, the protests reveal just how out of date, irrelevant and inadequate America’s labor laws have become. Why should hourly workers be “protected” from retaliation for speaking out, as stipulated in the National Labor Relations Act (enacted by Congress in 1935), while salaried workers receive no such protections and are, as such, vulnerable to firing for taking the same actions. Indeed, why doesn’t our labor law provide avenues for this broad coalition of workers to gain a voice in corporate governance without having to resort to last ditch public protests? By investing their skills, employees put their human capital at risk, just as the owners invest and put their financial capital at risk. It is time to treat both risk takers equally and provide workers a voice in the key decisions that will determine their collective future.

...the protests reveal just how out of date, irrelevant and inadequate America’s labor laws have become.

Third, Market Basket workers are sending a message to business schools across America that it is time to teach the next generation of managers how to lead companies in ways that better balance and integrate the interests of all stakeholders — owners and executives, middle managers who might someday lead the organization, front line employees who are the face of the company to customers, and customers and communities that support the business. There is ample research and practical evidence showing which finance, operations, human resources and labor relations strategies and practices are needed to manage a company successfully in this way. It is time to embed these principles in MBA courses and make them standard features in the toolkits for the next generation of managers, financial analysts and CEOS.

So, thank you, courageous Market Basket employees, for showing us all what needs to be done.